Pakistan announces withdrawal of tax exemption for industries in former tribal areas
KARACHI: The Pakistani government will not extend tax incentives for the erstwhile Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA), Finance Minister Mohammad Aurangzeb said on Thursday, and the business community across the country He said he was seeking conditions. For industries across the country.
In 2018, Pakistan approved tax exemptions for the former FATA, a tribal region in northwest Pakistan that merged with Khyber Pakhtunkhwa (KP) province. This exemption was also extended to PATA, an area within KP administered by the provincial government for historical reasons. and cultural significance.
The exemption was extended until January 2023, but an additional one-year extension was granted. These expiration dates are set for him June 30, 2024.
KP MPs this week called on the government to extend preferential treatment for the region, saying many princely states in northwest Pakistan decided to join Pakistan when they were promised tax exemptions after independence.
“These exemptions are scheduled to expire on June 30 this year by operation of law,” Aurangzeb said during the parliamentary session. He was responding to a reminder notice regarding withdrawal of tax exemptions and concessions in former FATA and PATA regions.
He clarified that the government was not “proposing new legislation” to extend tax exemptions.
“The tax exemptions at that time were given to sales tax and income tax to integrate these sectors into the mainstream economy,” the finance minister explained. He added that the business community is demanding a level playing field for industries across the country through interactions with the government.
This exemption was granted to industrial units of steel, plastics, ghee, textiles and other sectors and industries in the former FATA and PATA regions.
Aurangzeb said business delegations from across Pakistan are seeking tax exemption provided to the former FATA and PATA.
“Since the last few days, various stores including steel, cloth, tinplate, oil, tea and ghee have been coming in,” Aurangzeb said. “They all consistently ask about tax benefits.”
Former parliament speaker Asad Qaiser last week called on the federal government to extend the tax exemption until 2028. He argued that the withdrawal of tax exemptions would have a negative impact on industrial growth and employment in the region.
Some parts of northwest Pakistan, including Malakand division, have been on lockdown strikes for the past few days against the government’s decision to bring PATA under the tax net.
